Tasmania’s Government has decided to let the state go further into net debt as it prepares for the coming state election.
Tasmania’s Premier and Treasurer has confirmed she has failed to meet her budget targets.
Lara Giddings has delivered her third budget, confirming the state will post its biggest deficit.
When she first became Treasurer, Ms Giddings said the state could not afford to go into net debt.
Since then, revenues have plummeted, and today’s budget reveals they continue to fall.
The budget contains no new taxes and no increases in existing taxes. There are also none of the big public service job cuts of the past.
Instead, the Government has decided to let the state go further into net debt as it prepares for the election.
“It is about responsible fiscal management,” she said. “We don’t want to cut further, deeper harder. “I have not framed this budget in regards to an election.”
The deficit has blown out to $426 million, $143 million worse than what was forecast this time last year.
The budget is not expected to return to the black until 2017, not after the next state election as promised.
The Government blames revenue drops, including a $184 million write down in state tax returns over the next four years.
The budget papers say GST receipts will be down $94 million over the same period.
The biggest revenue hit will come from the Government’s three energy companies because Aurora Energy will be sold, and the carbon price has been cut on Hydro Tasmania.
Expected returns from the businesses have fallen $410 million over the forward estimates.
The state will remain in debt until 2016 to keep afloat, peaking in 2014-15. That equates to about $450 of debt for every Tasmanian.
Ms Giddings says that will be the lowest rate in the country.
Read the rest, ABC Online here
• Courtesy of TT’s John Lawrence there is The wisdom of Billy’s Blog which Lara’s finance advisers could read …
• Tom Ellison, TT May 6: It’s no secret. Tasmania’s economy is buggered. Not to mention the wisdom on TT of John Lawrence and Jarvis Cocker
• What Nick, Jan, Mary, Retailers etc say, TT Media here
Meanwhile …
• Ford Australia to close Broadmeadows and Geelong plants, 1,200 jobs to go
